The pocket watch is inside a cupboard that you can interact with. The cupboard itself is inside a small house that has 2 guards. One is level 12 and another is level 15. They are connected to each other, meaning that if you pull either of them, you will pull both.

Be extra careful especially if you are below level 15. My advice would be to kill the lower level first and then run away and heal up. And then come again to kill the other one.

It was horrible! Verna woke me when she heard a ruckus in the fields. The fields were full of hooligans. We left in a rush and I forgot to pack my pocket watch. Verna's pa gave me that watch on our wedding day and I feel just sick knowing those thieves have it. I left the pocket watch in the wardrobe at the farmhouse. Look for the field of pumpkins to the West -- you can't miss it. If you bring it back to me, I'd sure be grateful!